Gas Power Is Cheaper Than Wind, Despite Carbon Brief’s Claims
By Paul Homewood
h/t Joe Public
OFGEM have just announced the latest energy cap, which will apply to the period April to June. Technically it has fallen from £4279 to £3280, although reductions in government support mean that households won’t see any savings immediately.
The cap is based on wholesale prices between November and January. But as I have been reporting in recent weeks, market prices for both gas and electricity have been falling sharply since November, and this means that the cap should be much less come July, maybe to around £2100, assuming wholesale prices remain where they are now.
https://www.ofgem.gov.uk/publications/ofgem-announces-latest-quarterly-price-cap-update
But the announcement brought a ton of misinformation from Simon Evans, deputy editor at Carbon Brief (the renewable lobby group funded by the far-left European Climate Foundation):
https://twitter.com/drsimevans/status/1630167323146346500?s=61&t=3tYfH52GykL-oK6_GCQMew
Nobody would deny that gas prices are higher than two years ago, or that electricity prices are also higher as a result. However Evans is not telling the whole story, and has conflated the two graphs to mislead people.
TRICK 1
He has deliberately conflated the two graphs for gas and electricity to imply they are directly comparable. To be fair the graphs are OFGEM’s, but you will note that the y-axis is exactly the same on each. But closer examination shows that one is per therm and the other per MWh, something that some commenters on his Twitter have pointed out.
One therm equals 29.3071 KWh, so the January gas price of around 150p/therm equates to about £51/MWh, which is substantially less than the price of electricity. Since then gas prices have dropped further to 120 pence.
Evans claims that energy bills are high because of the price of gas, but clearly they would be much higher if we all had to use electricity instead.
TRICK 2
But the real dishonesty is his failure to mention that offshore and even onshore wind power is considerably more expensive than gas-fired power, despite the currently high price of gas.
Market prices of electricity averaged £121/MWh, and this price usually reflects the price of gas-fired power. However offshore wind farms subsidised under CfDs were paid an average of £167/MWh.
And offshore wind subsidised via ROCs, which account for about half of the offshore sector, earn £100/MWh on top of the market price, a total of £221/MWh.
The weighted average cost for all offshore farms was therefore £194/MWh.
Even onshore wind farms receive a subsidy of £52/MWh on top of the market price.
And these costs don’t even include the extra costs incurred by the grid associated with intermittent wind power.
If we had more gas-fired power and less wind power, our energy bills would be lower, not higher.
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NOT A LOT OF PEOPLE KNOW THAT 
Indeed so.
Of course the CFD element is about to get a ~10% index linking boost, just as other prices fall back.
The problem is that your message cannot be got through to the idiots in the government, who believe all the lies and propaganda from the renewables energy industry, its lobbyists and the MSM.
Hear hear. Sad to say.
I just sent this letter submitted by a Queensland Senator to the Federal government off Australia to Chris Skidmore – https://wattsupwiththat.com/wp-content/uploads/2022/11/220819-MRoberts-Submission-Climate-Change-Bills-combined.pdf. Since Parliament is gripped by total groupthink, he will probably discard it.
On the BBC Today programme yesterday morning Hugh Fernley Whittingstall in a long interview about Climate Change, and discussing what we “must do” to avert catastrophe, stated the usual misleading mantra that “wind is nine times cheaper than Gas”. A point also made by MP Grant Shapps on the same programme a week or so before he had the latest change of job ….. On both occasions the BBC did not question this nonsense.
Why would they question the “mistake” when “A lie repeated often enough becomes the truth”. What else would you expect from MiniTrue?
@frankobaysio
Personally I think the ‘9 times cheaper’ claim is such an egregious lie and also a significantly important claim that it should be the subject of a formal complaint.
BBC keep allowing guests to make the claim unchallenged, which is a de-facto acceptance of the claim.
By now the BBC have NO EXCUSE; they know it’s a false claim but by refusing to correct or challenge guests they’re implicitly misleading their audience.
‘Wind subsidies are at least 9 times greater than gas’ would be a more meaningful comparison. Or is it 90…900…??
So if the price is set by gas and my bill is say £2,700/year, if we just had renewables it would £300?
Just out and out lies.
Oh and dont forget all the extra costs of constraints mgt let alone the capex in the transmission system to attempt to reduce these costs.
I engaged with Dr Simon Evans a while back on Twitter.
He couldn’t accept a different opinion so naturally being an intelligent, well-qualified man he blocked me!
My understanding is that the LCOE for wind doesn’t include for backup and stability control.
My understanding is that coal-fired power stations are penalised by a “carbon tax”
Are gas-fired power stations penalised by “carbon tax” ?
Yes they are. The effective rate depends on how efficiently they manage to operate, which depends on whether they get to run at constant baseload output, or whether they consume fuel on standby and have to ramp up and down to help match demand. The difference is between roughly 60% and 40% conversion efficiency. A mid point is around 360g CO2/kWh, so with UKA trading at around £80/tCO2 it works out as just under £30/MWh on average at the moment.
Micky R , under the Emissions Trading Scheme , [ a carbon tax ,] large companies which use any ” fossil Fuels ” have to buy carbon credits to offset their use .
These carbon credits are given to wind/solar generators etc by the government .
The price of these credits went through a huge increase at the start of 2021 , which meant that coal / oil / gas power stations , refineries , airlines , manufacturing etc all had large irises in costs .
It also meant that the subsidies to unreliable generation was being hidden away by the fact that the money was coming indirectly from us in energy costs , fuel taxes , and price rises .
No doubt this very flaky wheeze was dreamt up by an incredibly clever humanties graduate working in the the Treasury? A long lost relative of Baldrick by any chance?
Yes Devonblue boy , it is a “Cunning Stunt ” . [ I think you are allowed to say that ].
By giving Carbon credits to the renewables , which the other companies then have to buy , they are concealing the huge amounts of subsidies which are being paid by the public in the form of much higher prices for energy and most other things .
A similar thing has been going on in America .
Tesla have been given carbon credits for its Emission Free ? cars , which they then sell on to other car manufacturers .About 1.5 billion worth , which turned a 700million years loss into a 700 million profit .
Which actually meant the cost of all other cars was put up to subsidies the EVs .
@ ITRW and IDAU, thanks for the clarification
Paul,
Thanks for continuing to expose this nonsense, with a very clear analysis. I’m afraid Carbon Brief have form on this subject. I wrote about it here:
And if we hadn’t had renewables for the years prior to the gas price spike we would have had much cheaper electricity then. These fanatics never do the sums for periods that don’t suit them. Renewables have a floor price that for most of the last few years has meant more expensive electricity.
Having just received notification of yet another conference from the Westminster Energy Environment & Transport Forum, this one on the “Next Steps for developing the UK Emissions Trading Scheme” with (guess who?) Lord Deben, Charlie Lewis (Dep Director, Emissions Trading, Department for Energy Security and Net Zero), plus a load of names of people from obviously vested interests. One such, I have never heard of before – not that it’s difficult to miss one as there are so many of them – Energy Systems Catapult. When I looked them up, I saw that Laura Sandys was a non-exec director – she creeps up every so often.
I do so admire Paul for all his efforts, but I do think that this gravy train has become so massive it can never be derailed.
If gas is now cheaper than wind, what is setting the wholesale electricity price?
The irony if it’s wind…..!!